Travelers Ins. Co. v. Henry, 2005 VT 68

Summary

The Vermont Supreme Court answered certified questions concerning whether a workers' compensation carrier may obtain reimbursement from, or a future credit against, underinsured motorist benefits recovered under an automobile policy purchased by the injured employee's employer. The court held that, under 21 V.S.A. § 624(e), reimbursement or a future credit is permitted only to prevent a double recovery. The court further held that the employee's economic and noneconomic damages must be determined and that reimbursement may be taken from the economic-damages portion of the UIM award.

Holdings

1. UIM proceeds recovered by an employee under an automobile liability policy purchased by the employer are first-party insurance payments or benefits and are not subject to a workers' compensation carrier's first-dollar reimbursement right.
2. A workers' compensation carrier's right to an offset or credit against future benefits is subject to the same limitation as reimbursement: it exists only to the extent necessary to prevent a double recovery.
3. The nature and extent of the employee's damages must be determined and the first-party award apportioned between economic and noneconomic damages. The workers' compensation carrier may obtain reimbursement only from the economic-damages portion to the extent the employee has already been compensated for those losses.

Questions Presented

1. Whether 21 V.S.A. § 624(e), as amended in 1999, permits a workers' compensation carrier to obtain reimbursement from UIM proceeds recovered under an automobile liability policy purchased by the injured employee's employer.
2. Whether the workers' compensation carrier may treat the balance of those UIM proceeds as an advance payment or credit against future workers' compensation benefits.
3. How the statutory exception for preventing double recovery applies to an employee's UIM recovery.

Disposition

other